Tuesday, April 8, 2008

Dollar in Small Dip after Fed Minutes Released

The dollar pretty much shrugged off the news from the Federal Reserve minutes released today, which had an outlook of contraction in the short term for the U.S. economy.

"There was little dollar reaction to the [Fed] minutes, where the key takeaway was the Fed's concern over the potential for a severe downturn," analysts at Action Economic said in a note.

Even the continual poor U.S. housing market didn't rattle the greenback today, as it only declined slightly on the dollar index, dropping 0.3 percent to 72.20. Before the Fed minutes were released, the index stood at 72.23.

The housing report showed pending home sales had declined by over 21 percent from the February 2007.

Against the euro, the dollar fell to $1.5731 before the data was released, where it stood at $1.5717 before. For the yen, the dollar rose by 0.03 percent to 102.36, in contrast to 103.41 before the reports were released.